One purpose of the related property provisions is to prevent a husband and wife, or civil partners, who control a private family company from giving away small slices of the shares at minority values and thus avoiding IHT on the value of the control element in the combined holdings.
For the purposes of this commentary, all references to 'spouse' include 'civil partner'.
The intention is not fully achieved in practice, because where shares are transferred in small parcels there is still some loss of chargeable value overall. It is generally beneficial for the spouse holding the least number of shares to make the first transfer and cross the 50% threshold.
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Web page updated on 17 Mar 2025 16:37